Press Release

State AGs Support Climate Change Disclosures in Comments to Securities and Exchange Commission

Responding to SEC’s call for comments on climate change disclosures, AGs agree that such requirements are central to both investor protection and “efficient capital allocation to climate-resilient companies.”

Washington, D.C. — A coalition of 12 attorneys general led by California Attorney General Rob Bonta filed comments today in response to the Securities and Exchange Commission’s request for public input on climate change disclosures. Combining the environmental and investor protection expertise of the attorneys general, the comments lay out the legal basis and the need for “detailed, meaningful disclosures related to the impacts of climate change on the company.” Requiring climate disclosures falls well within the authority of the SEC, and in fact, doing so promotes the Commission’s founding purposes, the AGs say.

“States not only directly face the effects of climate change, but they also have a strong interest in protecting their residents making investment decisions,” said Bethany Davis Noll, Executive Director of the State Energy & Environmental Impact Center. “This proceeding is an important step towards incorporating an understanding of the broad risks and effects of climate change into financial decision-making and taking a multifaceted approach to addressing climate change.”

“As the state prepares for the twin crises of drought and wildfires, Californians have a right to know what exposure their investments — including college savings, pensions, and retirement accounts — have to climate change,” said AG Bonta in a statement. “The SEC can ensure they get that information — by requiring companies to provide accurate, detailed information about their climate-related risks. I urge them to swiftly do so. Transparency about whether and how companies are addressing climate change is essential for investors, retail or institutional, to make smart decisions about where they put their money.”

“We ignore the climate crisis at our own peril. Climate change is already costing us billions of dollars and unchecked will touch every aspect of our lives, including our financial systems,” said Connecticut AG William Tong. “Our coalition is calling on the SEC to enact common sense requirements for U.S. companies to report and disclose how much financial risk they face because of climate change. This is a crucial step to protect Connecticut investors and shield our financial institutions from the devastating consequences of climate change. Full transparency around climate risks will strengthen our economy’s resilience.”

“U.S. companies should be fully transparent about the risks they face from the climate crisis,” Maryland AG Brian Frosh stated. “The SEC has the authority to require these disclosures, as well as companies’ plans to mitigate any impact they may sustain due to the climate crisis.”

The attorneys general of Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Oregon, Vermont and Wisconsin joined AG Bonta in filing today’s comments.

Background — The U.S. Securities and Exchange Commission released a statement on March 15, 2021 announcing plans to evaluate whether its disclosure rules sufficiently equip investors with “consistent, comparable, and reliable information on climate change.” The statement requested public input and provided a list of questions for consideration, such as whether to establish different disclosure standards for different industries, and how to best assess and enforce such disclosures. Led by then-Acting Chair Allison Lee, the request for comments came amid a wave of actions by the Commission indicating an increased focus on climate change, including the development of a Climate and ESG Task Force earlier this year. On March 25, West Virginia Attorney General Patrick Morrisey submitted comments opposing the implementation of climate change disclosures.


About the State Energy & Environmental Impact Center:
The State Energy & Environmental Impact Center at NYU School of Law is a nonpartisan academic center at NYU School of Law. The Center is dedicated to working towards a healthy and safe environment, guided by inclusive and equitable principles. The Center studies and supports the work of state attorneys general (AGs) in defending, enforcing, and promoting strong laws and policies in the areas of climate, environmental justice, environmental protection, and clean energy.